More economy in health policy is needed, Mr. Lauterbach!

Karl Lauterbach

However, health care has been getting more and more expensive for years, while the quality is declining.

(Photo: IMAGO/Political Moments)

Karl Lauterbach is driving the “de-economization” of the healthcare system from a building of all places that once beat the heart of German capitalism. In 2022, his ministry moved a few hundred meters from a functional building on Friedrichstrasse in Berlin to the former headquarters of Deutsche Bank – a magnificent building, built at the end of the 19th century and now freshly renovated.

The healthcare system with ailing hospitals and health insurance companies is yet to undergo this renewal. The health minister’s mantra is that economization has been taken “too far”.

In other words, the poor condition of the clinics, drug and supply bottlenecks – all of this is the result of economic thinking, the result of austerity policies and the increasing influence of investors on medical care centers.

This thesis fits into the zeitgeist, but is still not coherent. Lauterbach operates on the basis of an incorrect diagnosis.

Economics is about the economical and sensible use of resources. Lauterbach knows that, the man is a health economist.

However, health care has been getting more and more expensive for years, while the quality is declining. Medicines are scarce in pharmacies, surgeries are closing in rural areas, at the same time there are far too many hip and knee operations and the insured are paying record premiums, which apparently do not lead to the system improving.

More, not less, economization

The German healthcare system is many things, but it is certainly not thoroughly economized. Money is not saved at every corner, but wasted in many places. Lauterbach’s answer to this is: not more, but less economization.

What this misdiagnosis leads to can be seen, for example, in the clinical reform. According to Lauterbach, the flat rate per case is forcing hospitals into a hamster wheel, trying to stay afloat financially with more and more treatments. Only medical reasons should justify an intervention.

That’s correct. But Lauterbach fails to mention that the flat rate per case was originally intended to cover only the ongoing operating costs of a hospital – and not all expenses. But the flat rate per case has had to be used for years and also cover part of the clinic investments, which are actually the responsibility of the federal states.

The clinics have to get the missing money back with the scalpel in order to work reasonably profitably. Lauterbach can still work on the economization for a long time – without the federal states, nothing will change in the precarious situation of the clinics.

The fat years of healthcare are over

The alleged economization is apparently also seen as a free pass to continue to increase the income of the health insurance companies through contribution increases, although the insured are already paying record contributions and employers are groaning under record non-wage labor costs.

However, no health minister has dared to cut spending significantly for a long time. The system has gotten used to the fact that there is always more of everything. Benefit cuts are therefore highly unpopular, but there is no alternative, because otherwise income would have to increase more and more drastically.

Without increasing employment or sharply rising wages, from which the statutory health insurance funds are paid, the only way to do this is through higher contributions or more and more tax subsidies. It’s not economical – and certainly not sustainable. The problems are only pushed further and further into the future. The fat years in healthcare are over.

More: Why Germany has far too many clinics – and the emergency rooms are still overcrowded

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